CMS Issues Non-Residential Guidance

The Centers for Medicare & Medicaid Services (CMS) has released the final elements of the Home and Community-Based Services (HCBS) Toolkit—guidance to assist states in complying with the home and community-based non-residential settings requirements in the HCBS Rule. The two new elements of the toolkit are “Exploratory Questions to Assist States in Assessment of Non-Residential Home and Community-Based Service (HCBS)/Settings” and a substantially revised Q&A document called “HCBS Final Regulations 42 CRF Part 441: Questions and Answers Regarding Home and Community-Based Settings” that includes new questions regarding non-residential settings, but also substantially revised and expanded questions regarding other aspects  of the settings requirements. CMS indicates that these two documents “complete the subregulatory guidance that [it plans] to issue at this time.”

Exploratory Questions to Assist States in Assessment of Non-Residential Home and Community-Based Service (HCBS)/Settings

CMS previously released a set of Exploratory Questions to assist states in their assessment of residential HCBS settings, and is now releasing a similar set of Exploratory Questions for non-residential settings. CMS “encourages states to consult the residential guidance Exploratory Questions as well in evaluating their non-residential settings” as “many of the questions are relevant to all HCBS settings.” The purpose of this document is to “offer considerations for states as they assess whether non-residential HCB settings meet the Medicaid HCB settings requirements.” The optional questions for non-residential settings are organized by each HCB setting regulation requirement (in italics). These questions “serve as suggestions to assist states and stakeholders in understanding what indicators might reflect the presence or absence of each quality in a setting,” and “are not designed to be a score sheet.” CMS also points out that “not all questions relate to every HCBS or every individual served.” The agency emphasizes that simply asserting as part of a Statewide Transition Plan that a non-residential service adheres to these questions is “not sufficient to represent a state’s assessment of compliance with HCB requirements.” CMS clarifies that it “will not require use of these questions in [its] review of a state’s transition plan or plan for new program compliance.”

Significantly, in the introduction to the questions CMS indicates that “the nature of the service will impact how the state addresses the HCB settings requirements.” The state’s determinations about certain settings for services, such as those that are “highly clinical/medical in nature, e.g., medical adult day programs,” and “the extent to which changes in the settings are necessary to comply with the requirements,” may be “different than state decisions/actions for a setting that is less medical/clinical in nature,” CMS says. Further, states “should consider carefully the extent to which settings compliance is met due to the nature of the service and/or the HCB qualities.” For example, for individuals seeking supports for competitive employment, the state should consider not just whether the physical setting itself meets the HCB settings requirements, but also “whether the right service is being appropriately provided to achieve its goal, including the duration of the service and the expected outcomes of the service, or whether the provision of a different type of service would more fully achieve competitive employment in an integrated setting for the individual.” CMS acknowledges that some supports, such as primarily rehabilitative services that might offer physical, speech, occupational and other therapies), but also offer respite to family caregivers, “may be short-term in duration” and require “by definition that all participants have a disability,” while “another type of service may be designed to primarily offer personal care, social recreational supports and respite for family caregivers, and is more long-term in duration.” CMS reiterates that “the manner in which each of these services meets the HCB settings requirements may vary.”

HCBS Final Regulations 42 CRF Part 441: Questions and Answers Regarding Home and Community-Based Settings

CMS has divided the new Q&A document into several sections—on public notice and comment requirements, general settings requirements, residential settings requirements, non-residential settings requirements, and restrictions requirements. Some of the highlights of the document, but by no means an exhaustive summary,  follow.

Public Notice and Comments. This section reiterates some of the basic requirements for public notice for transition plans, and indicates that “a minimum expectation is that the document be available at the state’s Medicaid website, which should meet requirements for access by people with disabilities, and through an alternative method for those without internet access.” The state “must issue two statements of public notice and input procedures…using two different methods of notifying the public of the opportunity to comment,” and “submit to CMS evidence that it has provided timely public notice of the opportunity to comment on its transition plan. Acceptable evidence could include dated copies of letters, emails, newspaper announcements, and web postings.” CMS notes that “meeting with representative groups only and/or discussing/providing information on the transition plan without providing the transition plan itself to the public will not fulfill the public notice/input process requirements.”

Although new 1915(c) waivers and 1915(i) State Plan Amendments (SPA)s will not have transition plans because they are required to be compliant with the HCB settings requirements at the time of approval, CMS reiterates that the HCBS Rule requires states to “give public notice of the new waiver and/or SPA and at least a 30-day public input period prior to submitting to CMS.”

Home and Community-Based (HCB) Settings – General. CMS uses the very first question in this section to emphasize that states can “set higher standards or more restrictive requirements for HCB settings than those found in the regulation.” Another answer indicates that “the regulations allow states to presume the enrollee’s private home or the relative’s home in which the enrollee resides meet the requirements of HCB settings.” CMS also clarifies that the “control personal resources” requirement in the rule does not restrict the opportunity of individuals with representative payees or other types of fiduciaries, such as conservators, guardians, trustees, etc. to participate in HCBS programs.

CMS clarifies that “Non-disability-specific”, in the context of the regulation, means that “among the options available, the individual must have the option to select a setting that is not limited to people with the same or similar types of disabilities.” In other words, “people may receive services with other people who have either the same or similar disabilities, but must have the option to be served in a setting that is not exclusive to people with the same or similar disabilities.”

HCB Settings – Residential. In the first question, CMS directly addresses whether settings on the grounds of or adjacent to “private” institutions are considered not to be home and community-based, indicating that such settings “are not automatically presumed to have the characteristics of an institution,” but, if the setting “isolates the individual from the broader community or otherwise has the characteristics of an institution or fails to meet the characteristics of a home and community-based setting, the setting would not be considered to be compliant with the regulation.” CMS also reinforces that “states may elect to adopt more stringent settings characteristics that would not allow a setting to be on the grounds of a private institution.”

In response to the question “Do the Home and Community-Based (HCB) setting requirements address the number of individuals living in a residential HCB setting?,” CMS acknowledges that size can be an important factor in deciding whether a setting meets the requirements, while stopping short of stating that size on its own is a determinative factor, saying that “while size may impact the ability or likelihood of a setting to meet the HCB settings requirements, the regulation does not specify size.” The guidance then explicitly states that “states may set a higher threshold for HCB settings than required by the regulation, including the option to establish size restrictions and limitations.”

HCB Settings – Non-Residential. CMS indicates that it “does not intend to issue service-specific guidance at this time,” but “will continue to respond to questions from stakeholders and offer technical assistance to states.” However CMS does clarify that the regulation does not “prohibit facility-based or site-based settings.” Such settings, however, “must demonstrate the qualities of HCB settings, ensure the individual’s experience is HCB and not institutional in nature,” and ensure that they do not “isolate the individual from the broader community.” In particular, CMS says, “if the setting is designed specifically for people with disabilities, and/or individuals in the setting are primarily or exclusively people with disabilities and on-site staff provides many services to them, the setting may be isolating unless the setting facilitates people going out into the broader community.” CMS again emphasizes that “the regulation only establishes a floor for federal participation” and “states have flexibility in determining whether or when to offer HCBS in facility-based or site-based settings.” CMS also states that the regulations do not “prohibit individuals from receiving pre-vocational services in a facility-based setting such as a sheltered workshop,” but that “all HCB settings must support full access of individuals receiving Medicaid HCBS to the greater community, including facilitating opportunities to seek employment in competitive settings.”

The guidance also addresses whether “a day service that has both HCBS waiver participants and Intermediate Care Facility (ICF) residents” can provide Medicaid-covered HCBS in an Intermediate Care Facility for Individuals with Intellectual Disabilities (ICF/IID). If the service is rendered by the ICF/IID, CMS says “it is institutional and cannot be covered by HCBS.” If, on the other hand, “the service is provided by a licensed day service operated separately from the ICF/IID but in the same building, it will be presumed to have institutional characteristics.” If the state “believes that the setting meets the HCB settings requirements and does not have the characteristics of an institution, the state can follow the process to provide evidence and demonstrate that the setting can or will comply with the HCB setting requirements of the regulations.” The guidance then states that “other parties can submit information to CMS regarding whether the setting has the qualities of HCB settings or of an institution.” CMS officials have since clarified that such information will only be considered as part of a determination of the non-institutional nature of a setting if the state itself has decided to challenge the presumption of institutional characteristics.  

HCB Settings – Restrictions. This section reiterated that “in a provider-owned or controlled residential setting, states must ensure that any necessary modification of the requirements specifying the rights of individuals receiving services is based on individually assessed need and justified and documented in the person-centered plan as described in § 42 CFR section 441.301(c)(4)( vi)(F).” In other settings, “the individual must be afforded the rights of privacy, dignity and respect, and freedom from coercion and restraint,” and “the person-centered service plan must reflect risk factors and measures in place to minimize them, including individualized back-up plans and strategies.” Any restrictions on individual choice “must be focused on the health and welfare of the individual and the consideration of risk mitigation strategies.” The restriction, “if it is determined necessary and appropriate in accordance with the specifications in the rule, must be documented in the person-centered plan, and the individual must provide informed consent for the restriction.”

CMS indicates that it “has not established a uniform federal standard for measuring the effectiveness of past interventions.” The person-centered planning team must “consider what is a reasonable amount of time (e.g., week, month) to evaluate the effectiveness of an intervention, based on the individual circumstances, as well as weigh the risk, success and amount of time given for a response.” Data related to the utilization of positive interventions and supports, as well as less intrusive methods of addressing the need, must be collected and documented prior to making or amending any modification.

A modification “must be reviewed on a regular basis and should never become a ‘standing order’ without time limitations.” In addition, the person-centered plan “must be finalized and agreed to in writing, based on the informed consent of the individual.”

FMI: The non-residential exploratory questions are available at The revised Q&A document can be found at